Magal Security Systems Reports Third Quarter 2012 Financial Results
Source: Aviva Haleva
YAHUD, ISRAEL, November 29, 2012 － Magal S3 Ltd. (NASDAQ GMS: MAGS) today announced its financial results for the three and nine month period ended September 30, 2012. Management will hold an investors’ conference call later today, at 9:00 a.m. Eastern Time and 4:00 p.m. Israel time, to discuss the results.
THIRD QUARTER 2012 RESULTS SUMMARY
Revenues for the third quarter of 2012 were $23.5 million, a decrease of 15% compared with revenues of $27.7 million in the third quarter of 2011. The third quarter of 2011 was exceptional due to a particularly large project in Africa, that was delivered within a short period of time. On a sequential basis, revenues in the third quarter of 2012 increased by 43% compared with $16.4 million in the second quarter of 2012.
Gross profit in the third quarter was $9.7 million, or 41.3% of revenues, a decrease of 26% compared to gross profit of $13.1 million, or 47.2% of revenues, in the third quarter of 2011. The higher gross profit in the third quarter of 2011 was due to the large project in Africa. Gross profit in the third quarter of 2012 increased 34% compared to gross profit of $7.2 million, or 44.1% of revenues in the second quarter of 2012. The variance in the gross margin between quarters reflects changes between products and projects in the revenue mix.
Operating profit in the third quarter was $1.7 million, or 7.3% of revenues, compared to an operating profit of $5.6 million, or 20.4% of revenues, in the third quarter of 2011 and operating profit of $474 thousand, or 2.9% of revenues, in the second quarter of 2012.
Net income in the third quarter was $1.8 million, or $0.11 per share, compared with net income of $7.1 million, or $0.61 per share, in the third quarter of 2011 and net income of 938 thousand, or $0.06 per share in the second quarter of 2012.
Cash and short term deposits, net of current bank debt, as of September 30, 2012, increased to $39.2 million, or $2.44 per share, compared with cash and short term deposits, net of current bank debt, of $32.5 million, or $2.06 per share, on December 31, 2011
Commenting on the results, Mr. Eitan Livneh, President and CEO of Magal said, “We have shown continued sequential improvements in revenue throughout 2012 and have continued to build our profitability throughout the year. While our results in the second half of last year were exceptionally good due to the short delivery timeframe of the Africa Cup of Nations project, we are now executing on a much improved business platform than in previous years. We are very proud of our achievements and in the solid turnaround of our business over the past two years.” Continued Mr. Livneh, “During the quarter, we continued to progress on a strategic basis which we believe assures our long-term future. We began offering cyber protection solutions by teaming with other technology companies to deliver turnkey cyber security solutions for critical sites in addition to the physical security we already provide. This enables us to offer a fully integrated suite of protection for customers in both the physical and online worlds. We have also continued to focus on cementing our presence in various key strategic regions globally. As always, we continue to look for other adjacent and synergistic markets that we can enter and bring significant value. With close to $40 million in net cash, our strong and growing cash levels provide us with greater flexibility and we are in a strong position to capitalize on opportunities as they may arise.”